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Gambling Market and Trends - Online Gambling in Cyprus

Gambling Market Revenue and Trends .

Although you may have the ambition to start an online gaming firm, you may also be concerned about whether it is a wise investment at this point in time.

Gambling Market Revenue and Trends

Although you may have the ambition to start an online gaming firm, you may also be concerned about whether it is a wise investment at this point in time. While the rise and especially the fall of other worldwide businesses is experienced every day, the Gaming Industry has maintained its strength and continues to develop at a steady pace. As predicted by forecasters, it will continue to evolve in the next years, making an investment in an online gaming platform an excellent decision for entrepreneurs and investors.


It is expected that the worldwide online gambling industry will reach USD 158.20 billion by 2028, growing at a compound annual growth rate (CAGR) of 11.4 percent throughout the forecast period.


This market has undergone tremendous growth as a result of the coronavirus pandemic (one of the few markets), with a robust compound annual growth rate (CAGR) of 11.2 percent and a value of USD 74.17 billion in 2021.


According to a study by the International Game Technology Association, the sector is divided into sports betting, casinos, poker, lottery, bingo, and other types of gambling, with the lottery category accounting for 15.1 percent of the global market and 15.4 percent of the UK market in 2020.


Market categories that can be classified based on device type, include desktop, mobile, and other devices. The market is divided into five regions based on where you live: North America, Europe, Asia Pacific, the Middle East and Africa, and South America.


The rise in global betting popularity, as well as the freemium model in online gambling, are just a few of the potential opportunities that are predicted to develop in the coming years.


On a global scale, Statista forecasts that over 3 billion people will use or have access to a smartphone by 2020. According to the International Telecommunications Union, 2.4 billion people use their mobile phones to play games, accounting for 30.7 percent of the world's population. While not all of these people are likely to be online gamblers, the sheer number of them demonstrates the industry's size and the importance of tailoring your services to mobile users. You will be missing out on a huge chunk of your target market if your website and app are not mobile-friendly.


According to Google Trends, there has been a significant increase in the overall number of searches for online sports betting by consumers. This year's increase is estimated to be 2,850 percent more than the previous year. When the data is broken down by nation, Malta had the most population searches, followed by Ireland, Cyprus, Romania, and Sweden. According to the research, Poland, Slovakia, and Germany were identified as countries with little interest in sports betting. For anyone contemplating extending their online gambling services portfolio or adding a sports betting site, these insights are important.


More than anything, research shows that people are willing to pay for games and spend money while playing them, whether on their mobile phones or other connected devices. As a result, internet gaming operators have a major chance to reach customers across many generations.


Regulated vs. Unregulated Gambling

Given that internet gambling is such a new sector, it's unsurprising that there are still a lot of unregulated gambling sites. It's crucial to note that there is no global regulatory body for online gambling, therefore rules differ from jurisdiction to jurisdiction.


Countries that have legalized gambling in some form or another have put in place restrictions to protect players, such as age verification software and helplines for persons suffering from gambling addictions. With users putting money on these sites, it's also critical that rules exist to protect them.


A regulated online casino complies with all applicable laws in that jurisdiction and is answerable to the government and regulating authority in the event of a problem.

An unlicensed casino is not the same as an unregulated casino. To put it another way, an internet casino may be licensed by one gambling government but operate unregulated in another.


Online gambling in Cyprus

Cyprus is a relative newcomer to the online gaming business, having only entered in 2012. Online gambling was just authorized in 2016 on the eastern Mediterranean island of Cyprus, and licenses are only available for sports betting (online casinos and games of chance are still illegal). Despite this, online sports betting has proven to be popular in Cyprus, and the business appears to have a bright future. It is our opinion, which is supported by the regulators belief in innovation, that the online gaming industry in Cyprus will evolve and new licenses will encompass more aspects of global gaming industry.


If you're thinking about starting an online gambling business in Cyprus, you'll want to get a sense of the local market first. Betconsultant.cy has compiled information about Cyprus online gaming from government papers, academic research, and industry insights to give you a complete picture of the industry.


Cyprus is a popular destination for online sports betting companies looking to grow their market share. Our examination of Cyprus's online gambling data reveals a fascinating industry.


The Market

In Cyprus, the National Betting Authority (NBA), or the betting companies' regulator, makes this indicator transparent. The NBA collates all betting company reports in full and issues quarterly reports on the industry's results on its website.

As can be seen in the table and graph below, from 2018 to 2020, there was a significant increase in annual GGR for Class B.

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Despite the fact that handling was notably lower during the coronavirus outbreak, revenue was significantly higher in percentage terms than in previous years. This could be due to the fact that many traditional sporting events have been cancelled, and sports bettors have turned their focus to lesser-known leagues and tournaments in which they are unfamiliar with the teams competing (for example, Swedish ice hockey matches or South African football leagues).


Since the legalization of online betting in 2016, the average profit margin of Cyprus' online betting firms has been around 7%.

Profit Margin

2018 8 %

2019 9%

2020 10%

First quarter 2021 11 %


The Authority's income from betting tax in

2018 Euro 8,920,954

2019 Euro 8,880,885

2020 Euro 8.938,512


The Cyprus National Betting Authority (NBA) reports that 12 companies now have a Class B license, allowing them to offer online sports betting.

The NBA is a vigilant regulator that is always on the watch for websites that offer illegal online betting and casino games to Cypriots. So far, they've blocked 14,381 websites.


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In Cyprus, online horse racing is a monopoly of the Nicosia Race Club, while betting on dog racing via the internet is banned. The vast majority of other sports are authorized.


Who gambles online in Cyprus?

Cyprus has a population of 1.2 million people, with around 950,000 of them of gambling age. According to the UK Gambling Statistics 2021, almost 75% of Cypriots gamble at least once a year, with national lotteries being by far the most popular. This suggests that the country's gambling population is around 700,000 people.


30 percent of Cypriots are aware of online sports betting, according to a study performed by the National Betting Authority. In addition, 17 percent of Cypriots participate in online sports betting, according to the poll. This means that over 150,000 people on the island gamble online at least occasionally.


The majority of Cypriots (68 percent) only wager with land-based operators, according to the NBA poll. Furthermore, the majority of people who wager both online and in person favour traditional brick-and-mortar bookmakers and casinos to Internet alternatives.


Nonetheless, younger age groups have a far larger interest in online betting. 5% of 18-25-year olds say they spend more money on online betting platforms than they do on traditional betting platforms. This suggests that as today's youth grow older, more control will be transferred to the internet.


The coronavirus epidemic would undoubtedly benefit Cyprus' online sports betting firms, since players have become accustomed to making wagers online.


GAMING LICENSE IN CYPRUS


The Cyprus “The Betting Law 2012 – Law 106(I)/2012.” introduced a partial legislative framework for legislating betting activities, introducing new rules and updating some others. Introducing the “National Betting Authority (NBA)” which is the supervising authority over all betting activities in Cyprus from Land based bookmakers to online gaming operators. The law has been repealed and “The Betting Law of 2019- Law 37(I)/2019” is the applicable legislative framework on betting activities.


Type of licenses

1. Class A – Regulates land based sports betting – bookmaker shops with physical Premises excluding Class B Services and horse racing.

2. Class B – Regulates Online based activities excluding slot machines, online casinos lotteries.


Application Procedure

The application requirements for an applicant in order to obtain a Class A or B Licences are:

  1. Bank Guarantee by a bank of Cyprus or other EU member state of the amount of EUR 550,000 expiring six months after receipt of the license.

  2. Demonstrate the ability to have sufficient resources to pay players winnings

  3. Has shares registered in Cyprus

  4. Has the ability to comply with regulations for the protection of players as imposed by the (National Betting Authority NBA) under the “Betting law of 2019”

  5. Is registered abroad, but has an overseas company branch in Cyprus or a partnership with a Cypriot company and whose principal activity is the carrying out of bets. In this case, the issued and paid up share capital must be at least EUR500,000. The required capital applies to both Cypriot and overseas companies.

  6. Maintains a suitable control and accounting system for the provision of betting services

Cost and Duration of License

  • All Licenses are issued for one or two years and may be renewed on application, NBA can revoke or suspend a license in the event of failure to comply with the regulations under the “Articles 24 & 25” of betting law 2019.

  • The Licensee must pay a fee of EUR 30,000 For one year and EUR 45,000 for two years.

AML Legislation

  • Accepted payment methods for Class B are Debit/Credit Card and/or other kinds of electronic payment (Article 58, Betting law 2019)

  • No cash transactions are allowed for Class-B licensees electronic bets (Article 62 Betting Law 2019).

  • Class B licensees are prohibited from accepting a bet, unless in the account maintained in the name of the player are sufficient funds to cover the amount of the bet

  • Class B license must maintain a valid bank account at an authorized banking institution operating in Cyprus.

Taxes for online gaming companies Cyprus

Cyprus has an attractive tax regime for online sports betting businesses, with an effective tax rate of 13% on revenues. It is broken down as follows:

  • 10% for central government

  • 2% towards the development of sport in Cyprus

  • 1% to finance responsible gambling initiatives

Technical requirements

  • A backup server in the territory of republic of Cyprus which shall be linked to the authority’s computerized systems and have the ability to facilitate real time transactions and information’s about betting activities.

  • A specialized website address ending with TLD of “.com.cy” from the Cyprus cydns regulatory.

  • The betting platform must meet all the criteria as described in (Directive_03_2020) of Betting Law 2019


DISCLAIMER


This article and its publication are intended to provide a brief introduction and act as a general guide. This is provided for information purposes only and cannot be utilized as a substitute for professional advice. This document does not represent a legal opinion and one must not rely on it without receiving independent advice based on the particular facts of its own case. No responsibility is accepted by the author or the publishers for any loss suffered from acting or refraining from acting based on the contents of this publication.



HOW WE CAN ASSIST WITH THE SET UP OF YOUR CYPRUS ONLINE BETTING COMPANY

BETCONSULTANT.CY offers a wide range of expertise in the online gambling businesses.

BETCONSULTANT.CY has developed a wide range of services to help its clients succeed in their respective industries.

Corporate strategy, licensing applications to various jurisdictions, regulatory compliance, due diligence, risk management, intellectual property, designing & marketing, opening and managing bank accounts are some of the services we provide to our clients. We are a one stop shop for the online gambling industry and for online businesses in general.


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